Another sudden thunderclap in the international currency world: the crypto giant with over $110 billion in assets trading unexpectedly declared bankruptcy, once again sending the global cryptocurrency market into turmoil. island.
On January 19, Genesis Global Capital filed for bankruptcy in a US court (Photo: Sina).
Debt more than $ 3 billion “currency giants” filed for bankruptcy
Theo Securities Times (Stcn.com), January 19, 2023 local time, cryptocurrency lender Genesis Global Capital has officially filed for bankruptcy protection with the Federal Court for the Southern District of New York. As one of the largest crypto lenders in the world, in 2022 Genesis issued crypto loans totaling $130.6 billion.
In court documents, Genesis said the size of its liabilities ranges from $1 billion to $10 billion.
According to media reports, Genesis currently owes creditors more than $3 billion and after filing for bankruptcy protection, creditors’ claims will be handled through Chapter 11 procedures. of the US Bankruptcy Law. Genesis and its advisors said they will continue to evaluate options to accelerate progress towards a global solution.
Genesis declared bankruptcy, causing the world’s cryptocurrency market to wobble (Photo: Sina).
The bankruptcy filing Genesis has released a List of its 50 largest creditors, including Gemini Trust Company ($765 million), Mirana Ventures Mirana Corp ($151 million), Moonalpha Financial Services Limited ($150 million), ), the Coincident Capital International Ltd organization under the Cryptocurrency Hedge Fund Coincident Capital ($112 million), Decentraland ($55 million), VanEck ($53 million), Cumberland ($18 million), Stellar Foundation ($13 million), ) . According to statistics, the amount of money Genesis owes to these 50 largest creditors has exceeded $ 3.5 billion.
It is worth mentioning that Genesis Global Capital is one of the largest cryptocurrency lenders in the world, representing digital assets to financial institutions such as hedge funds and asset management companies. According to information provided by Genesis, in 2022, Genesis has issued a total of 130.6 billion USD in crypto loans and the asset transaction size is up to 116.5 billion USD.
After Genesis filed for bankruptcy, the fate of its owner, Digital Currency Group (DCG), is also worrying the currency world.
Genesis has previously warned that it may have to file for bankruptcy if it can’t raise cash. Genesis’ parent company Digital Currency Group (DCG) has written to shareholders saying that the company is pausing its quarterly dividend to save cash.
Sam Bankman-Fried, the owner of the FTX virtual currency exchange, was arrested by the US police (Photo: Sohu).
DCG is the world’s largest crypto venture fund and the parent company of Grayscale and CoinDesk. According to official information, Digital Currency Group was established in 2015 and has continuously received support from investors such as SoftBank, Singapore Government Investment Corporation (GIC) and Alphabet’s CapitalG Venture Fund. .
FTX “explosion” becomes “the last nail in the coffin”
The reason why Genesis suddenly filed for bankruptcy was due to a series of crisis events in the currency world since the beginning of 2022 until now. Among them, FTX, one of the world’s largest virtual currency exchanges, “exploded” as the last straw to crush or the last nail to be driven into the coffin that buried Genesis.
On 11/11/2022, FTX filed for bankruptcy. Funds of more than a million customers around the world were embezzled and account balances could not be withdrawn. Its founder, Sam Bankman-Fried, a 9Xer dubbed the “Buffett Version 2.0” became the target of public criticism. The US Securities and Exchange Commission (SEC) has accused Bankman-Fried of embezzling billions of dollars in customer deposits to fund its business and political activities. US federal prosecutors say that Sam Bankman-Fried orchestrated one of the largest financial scams in American history.
At the time, Genesis urgently halted customer withdrawals citing “unprecedented market volatility” and liquidity problems.
Since then, the Genesis company has been trying to find new funding sources without success. In the end, they had no choice but to file for bankruptcy protection with the court on January 19.
By page Blue Whale Finance (lanjinger.com), in November 2022, FTX, the world’s second largest cryptocurrency exchange went bankrupt, Genesis was badly affected, had to freeze all customer accounts on November 16th. 2022, could not meet the customer’s repurchase request. According to public information, $900 million in customer funds on the Gemini cryptocurrency exchange are trapped in Genesis.
Mr. Derar Islim, CEO of Genesis Company (Photo: Sina).
According to people familiar with the matter, Genesis and parent company DCG have been in secret talks with creditors about debt repayment and asset disposition, but so far no consensus and plans have been reached. can still change. In addition, Genesis is working on a restructuring plan and has negotiated with creditors, some of whom have proposed to obtain cash and stock ownership from DCG. If Genesis cannot raise cash, it must file for bankruptcy at the beginning of the week. On January 6, a person with knowledge of the matter revealed that Genesis had cut staff by 30%.
In the past, Genesis has suffered heavy losses because of loans to SBF’s trading agency Alameda Research and Three Arrows Capital. Both Alameda and the Three Arrows filed for bankruptcy last year. After the liquidation of Three Arrows, Genesis had to lay off 20% of its employees.
By page Jiemian.com, Genesis suffered a loss of $2.36 billion due to the Three Arrows Capital storm. After FTX went bankrupt, Genesis revealed that its derivatives business had $175 million in non-cashable funds.